Mitchell v. Rice

132 Ala. 120 | Ala. | 1902

SHARPE, J.

— In January, 1888, under a decree of the chancery court defendant Andrews as register in chancery sold for division certain lands from the proceeds of which complainant was entitled to $5,190.80 and Thomas Bond and his three minor children weré each entitled to $1,297.70. Prior to February 26, 1890, the purchase money had all been collected by the register who Avithout authority had placed it by general deposits in the. private bank of defendant Campbell. Previously an order had been made in the same case which, conditioned upon his giving bond, appointed Campbell trustee for the interested minors with authority to receive their shares of the funds, but he had not accepted the trusteeship or given the required bond. On the last mentioned day the register having reported collection in full another order was made appointing Campbell as trustee to receive the money of all the infants upon his giving bond but he did not accept or give bond under that order. In August, 1890, Campbell, and his bank failed financially and the money of complainant and the Bond children became lost to them and to the register. Before his failure Campbell transferred to Andrews certain dioses in action as security for the deposit made of the land moneys. 'The register’s official bond was for only $5,000 and defendants Mitchell- and Campbell were the" only sureties thereon. Andrews the register and Mitchell were half brothers ¡to each other and they were each brother-in-law to Campbell. The Bond children through their attorneys procured an order for their shares to be paid to their guardian and about February, 1892, made demand on Mitchell for the amount due them. According to Mitchell’s testimony which is un-contradieted, he consulted with those attorneys as to whether a payment made by him as surety on the bond without a judgment against him as such would protect him from further liability on the 'bond and was advised by them that it would, to the extent of the payment. Mitchell testifying as to what then occurred says: “Before I made any payment I went to see Mr. Campbell with reference to his protecting the interest of the other children. I cannot recall the conversation. The purpose I had in view was to protect all the children that had an interest in this fund. I undertook to pay off the Bond children and to get Campbell to qualify as guardian of Ariadne Kice, and to pay off or protect her interest.” Following this conference between Mitchell and Campbell, but ait whose instance it does not appear, there was in February, 1892, an order of court made appointing Campbell trustee for complainant alone with authority to receive her money on condition that he should give bond as such trustee in a prescribed sum. Pursuant thereto he gave a bond whereupon the register made an order approving the bond and making the appointment absolute. Mitchell tendered most of the amount due the Bond children to their attorneys who directed that he hand the same to the register to be forwarded to the guardian of those children, and accordingly lie handed the register from time to time sums amounting in all to about $4,000, covering most of the amount clue them with interest. Thereafter the register made payments to appellant to amount of about $2,000 on account of the money so furnished by appellant, though appellant testifies that when he furnished the money he regarded the register as insolvent and that he did not expect it would be repaid. In February, 1893, [the register filed a report stating among other things that pursuant to the court’s orders he had paid the sum due the Bond children to their guardian and that lie on the 2nd of March, 1892, turned over to Campbell, as trustee for complainant, the sum due her. The probate court thereafter appointed a guardian for complainant and to him the chancery court ordered Campbell to pay complainant’s money. In 1895 on proceedings instituted in the original chancery suit by complainant’s guardian to compel a settlement with the guardian by Campbell it was ascertained that nothing had been paid Campbell on complainant’s account after he qualified as- trustee and that he had received of the register of complainant’s money only the general deposits made in his bank before its failure. In the same proceeding, and on a report disclosing that fact, made by a register who had succeeded Andrews in office, a decree was rendered in favor of complainant’s guardian and against Campbell and the sureties on 'his bond as trustee for the amount due complainant of the land money with interest. Campbell and his sureties were then insolvent and that decree was not collectible.

The bill is not subject to the demurrer. It is not a bill of review but one which -seeks the ascertainment and enforcement -of complainant’s interest in a security consisting of the register’s -official bond, and to vacate de-cretal orders as fraudulently obtained, in so far as they purport to acquit him and his sureties of responsibility for complainant’s money collected by the register for her land, and also to subrogate complainant to the rights of Andrews the register in "securities alleged to have been given him by Campbell on account of -deposits of her money in his bank. For these purposes the bill has equity as an original bill. Without doubt the orders of court recognizing the payment by Andrew's the register to Campbell as trustee of complainant’s money were procured by the register’s fictitious- report of such payment together with his concealment of the fact that the money had previously been lost by the bank failure. Such action of Andrews by whatever motive prompted, amounted to a fraud "without which the orders assailed would not have been entered and they were properly vacated by the decree in this cause. The vacation of decrees fraudulently obtained is witliin tbe original jurisdiction of chancery.—Curry v. Peebles 83 Ala. 225 Ex parte Smith, 34 Ala. 455.

The fruitless prosecution by compainant’s guardian of proceedings for a settlement by Campbell as trustee does not preclude, complainant from pursuing such remedy as she would otherwise have had upon the register’s bond. To bind an infant to an election of remedies which will prejudice her interest is not within ¡the scope of a guardian’s representative power.

The general deposit of the land proceeds in Oampbell’s bank amounted to a loan, which being unauthorized by the parties interested or by any order of court was an unlawful disposition of these proceeds.—Alston v. State, 92 Ala. 124. The proposition that the register is a proper custodian of moneys, belonging in the chancery court in a sense that binds his bondsmen for a misappropriation of such moneys, is not disputed and is fully supported bv the authority of Coleman v. Orman, 60 Ala. 328.

But it is contended for appellant that the money he furnished ito pay the Bond children should be taken as discharging the pro tanto his liability on the register’s official bond, and that because a surety’s obligation is limited by the penalty of his bond, he cannot be held liable to complainant in excess of the difference between the sum lie so furnished and the penality of that bond. By his own testimony it appears appellant was partly if not solely the author of the plan whereby Campbell was constituted trustee and ostensibly the recipient in that capacity of complainant’s money. If as he testifies this course was adopted to protect complainant’s interest it is apparent that he contemplated also that the plan would operate to shift responsibility for that money from the register, and consequently from himself as surety on the register’s bond. Assuming the plan would succeed in these objects it became immaterial to his interest whether the Bond children were paid by him as a surety or by the register, and the latter course must have commended itself to appellant because of its tendency to avert from his brother the register the consequences of official delinquency. The double motive to so shield ¡the register and protect himself would naturally lrave led appellant to see to the application of his money and to acquaint himself with the register’s report of what' had been done in furtherance of his plans. It must, therefore, be inferred that he knew the contents of that report and that he acquiesced in, if he did not authorize that part of the report which purports to show the Bond children were paid by the register in his official capacity. The course taken by appellant in delivering the money to the register instead of to the attorneys or guardian of the Bonds is best explainable upon the theory that there was a tacit understanding whereby the register was allowed to make and report the payment as in discharge of his official duty. Such we conclude was the true nature of the transaction and so- assuming it is immaterial -whether tht money was furnished the register gratuitously or by way of a loan, for it could not have been applied both in discharge of his official duty and to a secondary liability arising from his default.—Moore v. Worsham, 5 Ala. 645.

Let the decree of the chancery court be affirmed.